UAC firm calls for new policy on retail sector, begins Galaxy Mall

In 2015, the retail sector of the real estate industry experienced a huge setback in its growth and development due to some abrupt modifications to certain regulatory policies, which stalled new development activities and stifled existing operations

FRONTLINE real estate firm, UACN Property Development Company Plc (UPDC) has urged the Federal Government to review the existing policy framework and create a robust platform that will support and indeed accelerate the much desired “retail revolution” in Nigeria.

The firm spoke last week in Kaduna, Kaduna State, the takeoff of yet another project aimed at boosting the retail sector of the real estate industry, named Galaxy Mall, a partnership project between the Kaduna state government and UPDC.

With the landed property provided by the state, the developer is set to create a unique node of commerce, entertainment and leisure, which will add great value to the entire citizenry of Kaduna state.

Galaxy Mall, which has a gross lettable space of 10,000m2, when completed, will accommodate main anchor tenant, a sub anchor tenant, a food court, 37 line shops and a contemporary amusement arena. The design of the Mall was said to be very flexible and scalable to create additional shopping space in the future.

Also, the project has been said to have the potential to generate about 2,000 direct and indirect jobs in the state and would also significantly reshape and transform the socio – economic landscape of this community in particular and the city in general.

Kaduna State Governor, Malam Nasir El-Rufai, who spoke glowingly on the project said he and the people of Kaduna were delighted with the arrangement between the government and the private sector in developing such an initiative in the state.

He said that, UACN Property Development Company has proved to be a reliable partner in the realtor sector in the country; adding that within two weeks of taking his seat as the governor of Kaduna State, the company had visited and identified potential sites in the state for development

However, as virile as the retail sector is , the Managing Director, UPDC, Mr. Hakeem Ogunniran said that it was time for the government to review some of its policies facing the retail value chain in Nigeria.

According to Ogunniran, the retail real estate sector of the economy, between 2009 and 2015, gained significant interest from local and international investors – developers and retailers, who sought to support the development of modern shopping malls and centres similar to those in Europe, America, South Africa and other developed nations.

He added that, the sector has gained a high level of recognition such that the New York Times recently carried a feature article titled “Nigeria Goes to the Mall”.
“The sector attracted Foreign Direct Investments of $2bn – $3bn from a zero base, which were deployed towards the development ofabout 20 shopping malls and centres in over 10 cities, including: Lagos, Ibadan, Abuja, Port Harcourt, Kano, Warri, Ilorin, Enugu, amongst others. Worthy of particular mention is the Festival Mall in Lagos, recently commissioned by a consortium of investors led by our company.”

Apart from accelerating the infrastructural development of the various states, Ogunniran said that activities within the sector have enhanced the socio-economic wellbeing of Nigerians through employment generation for both skilled and unskilled workers, emergence of Nigerian retail brands across various product lines – fashion, food, healthcare etc. such as Healthplus, Medplus, Casabella, Mobos, Kilimanjaro, among others.

Despite huge investment in 2014, UPDC’s boss said that in 2015, the sector experienced a huge setback in its growth and development due to some abrupt modifications to certain regulatory policies, which stalled new development activities and stifled existing operations in the sector.

Highlighting the challenges, the former don, decried the Central Bank of Nigeria’s prohibition of USD, being a cheaper financing option; the uncertainty and ambiguity of the Central Bank of Nigeria’s classification of 41 items as ineligible for accessing USD from the official market as most retailers – including the anchor tenants are unable to support their businesses, and the challenge with 41 items, being the broad definition of the product categories.

Also Ogunniran said, retailers who have chosen to procure USD from other international sources have not been able secure the Central Bank’s approval of their Form M(s), which are required for the importation of stocks, thereby leading to significant financial loses and uncertainties in the direction of the Federal government’s policy continue to create a huge concern.

These constraints, Ogunniran said had resulted to some of the large international and local retailers operating in the Nigerian market have started to review their operations in some malls, retrenching workers and holding backon their commitments to take up spaces at the newly planned malls; as others from the Middle East, Europe and America who were planning to invest in Nigeria have begun to withdraw their plans.

Notwithstanding the ugly trend, Ogunniran believed that the sector could be salvaged through the Federal government’s intervention in providing an enabling business environment for developers and secondary participants in the value chain to expand and implement backward integration strategies over defined timelines as well as encouraging a lower interest regime to support the development of bankable projects in Nigeria by local and international investors.